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For the week of Oct. 20, 1999 through Oct. 26, 1999

Sun Valley mayor invites Air Ketchum chief to discuss Horizon subsidy

Express Staff Writer

In response to recent accusations by Leonard McIntosh that the city of Sun Valley helped put his company, Air Ketchum, out of business by illegally subsidizing Horizon Air, the city’s mayor has invited him to address his concerns at the next city council meeting.

"Given your comments in the newspaper," Mayor Thomas Praggastis wrote in a letter addressed to McIntosh on Oct. 11, "I believe it would be appropriate if I, on behalf of the city, extend you an invitation to address the city council on this Horizon Airlines matter."

In a telephone interview Tuesday, McIntosh said that he hadn’t yet received the letter, but that he had no interest in attending the meeting. "They’re just covering their butts," he said of the mayor and the council.

The matter began several weeks ago when the cities of Ketchum and Sun Valley agreed to join Sun Valley Company and Elkhorn Resort in guaranteeing Horizon against losses in its upcoming winter flights between Boise and Hailey.

Since then, there has been enough concern by Ketchum about the legality of the subsidy that the city has withdrawn the offer. Sun Valley, however, has chosen to funnel the money through the Ketchum/Sun Valley Chamber of Commerce.

On Sept. 30, when McIntosh announced that the move had forced Air Ketchum to cease scheduled operations, he said, "Frankly, they’re just too stupid to realize what they did," of the council members. And he accused them of "laundering" the subsidies through the chamber of commerce.

In his letter, Praggastis said that the Sun Valley City Council did raise the issue of whether the subsidy would effect Air Ketchum, and that the council determined "that the markets to which [Air Ketchum] and Horizon were catering were not substantially the same."

McIntosh disagreed, then added, "Anything I have to say, they probably don’t want to hear."

In a separate statement, Sun Valley’s city attorney, Rand Peebles, said that because the chamber of commerce’s mission is "to improve air and ground transportation access for residents and visitors," the city increasing the chamber’s budget should not be viewed as a "maneuver" to avoid an illegal direct subsidy.

In response to that and other comments by Peebles, McIntosh said, "He’s an attorney. I assume they pay for his advice. When they don’t like his advice, they’ll hire somebody else."

Peebles said that he doesn’t understand the "concept of ‘laundering’ as it pertains to this situation." He said the city is at this point renewing its contract for services with the chamber of commerce and that "a contract for services is not a subsidy."

Peebles said that he understands that the city is extending to McIntosh an opportunity to address the city council with his concerns.

But McIntosh believes the issue is bigger than that.

"As far as I’m concerned," he said, "the matter really belongs to the electorate."


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